Here We Go Again: Mortgage Rate Drops, Hits 3.49%

Mortgage rates have struck yet another record low. Does this sound familiar?

For the week ended Thursday, the traditional, or conforming, 30-year fixed-rate mortgage averaged 3.49%, compared with 3.53% during the previous week and 4.55% a year earlier, according to mortgage-finance company Freddie Mac.

How low is this? On an annual basis, the average rate for 30-year loans was 16.63% way back in 1981, according to Freddie Mac.

Rates on 15-year fixed-rate mortgages, which have become increasingly popular with consumers looking to pay off a loan in half the time, averaged 2.8%, down a hair 2.83% a week earlier and 3.66% a year ago. Five-year adjustable-rate mortgages, or ARMs, averaged 2.74%, compared with 2.69% the previous week and the 3.25% rate set a year earlier.

While lower-than-low rates have convinced some that it’s time to buy, not everyone believes they’re doing much to spur sales.

“News of mortgage rates falling to fresh lows may have become an almost weekly occurrence, but there’s relatively little evidence that this is translating into stronger housing demand among mortgage dependent buyers,” Capital Economics writes. “The underlying improvement in sales activity remains heavily dependent on investors and cash buyers, who are attracted to housing in part because of low yields elsewhere.”